EX-10.2








    Exhibit
    10.2



 




    COVANTA
    GUARANTY



 



    As of August 19, 2008



 



    Ridgewood Providence Power Partners, L.P.,

    Ridgewood Rhode Island Generation, LLC,

    Linwood 0708 LLC

    947 Linwood Avenue

    Ridgewood, NJ 07450

    Fax:
    (201) 447-0474



 



    Attn: Randall D. Holmes



 



    Ladies and Gentlemen:



 



    For value received, Covanta Energy Corporation (the
    “Guarantor”), a corporation duly organized
    under the laws of Delaware, unconditionally and absolutely
    guarantees to Ridgewood Providence Power Partners, L.P.
    (“RPPP”), Ridgewood Rhode Island Generation,
    LLC (“RRIG”), Linwood 0708 LLC
    (“Linwood”) and Rhode Island LFG Genco, LLC
    (“RILG” and together with RRIG, RPPP and
    Linwood, the “Counterparties”), the prompt and
    complete payment when due, whether by acceleration or otherwise,
    of all payment obligations and liabilities (the
    “Guaranteed Obligations”), whether now in
    existence or hereafter arising, of Indeck Maine Energy, LLC, a
    limited liability company duly organized under the laws of the
    State of Illinois (together with its successors, the
    “Company”), pursuant to that certain Backup
    Certificate Agreement, dated on the date hereof, among the
    Company, RPPP, RRIG, Linwood, RILG and Ridgewood Power
    Management LLC, as agent for RPPP, RRIG and Linwood under the
    Agreement (defined below) (the “Backup
    Agreement”). Each capitalized term used but not defined
    herein shall have the meaning given to it in the Backup
    Agreement.



 



    This Guaranty is one of payment and not of collection.
    Notwithstanding anything to the contrary, the total liability of
    Guarantor hereunder, regardless of any amendment or modification
    to the Backup Agreement, shall not exceed at any time an amount
    equal to 80% of the amount required to be funded at such time in
    the Account (as defined in the Agreement as defined below) under
    and pursuant to Section 5.2 of the Certificate Purchase and
    Sale Agreement dated as of April 30, 2003 among the
    Company, RPPP, RRIG, Ridgewood Power Management LLC as agent
    (“RPMC”) and Constellation Energy Commodities
    Group, Inc., f/k/a Constellation Power Source, Inc.
    (“Constellation”), as amended by that certain
    letter agreement dated January 25, 2006, by Amendment
    No. 1 thereto dated as of October 31, 2006 and by the
    Assignment, Assumption, Release and Amendment Agreement of
    Certificate Purchase and Sale Agreement, among Constellation,
    the Company, RPPP, RRIG, RPMC, Ridgewood Electric Power
    Trust III, Ridgewood Electric Power Trust IV,
    Ridgewood Electric Power Trust V, Ridgewood Power B
    Fund/Providence Expansion and Linwood, dated as of July 31,
    2008 (together the “Agreement”), but not the
    amount required with respect to Section 3.6 of the
    Agreement, but in any event not to exceed a maximum amount of
    $7,300,000 (the “Liability Cap”). For the
    avoidance of doubt, the Guaranteed Obligations may at any time
    and from time to time exceed the liability of the Guarantor
    hereunder without impairing this Guaranty. The Guarantor’s
    obligations and liability under this Guaranty shall be limited
    to payment obligations only, and the Guarantor shall have no
    obligation to perform (other than payment of this Guaranty)
    under the Backup Agreement, including no obligation to generate,
    obtain or provide Certificates.



 



    The Guarantor hereby waives notice of acceptance of this
    Guaranty and notice of any obligation or liability to which it
    may apply, and waives presentment, demand for payment, protest,
    notice of dishonor or non-payment of any such obligation or
    liability, suit or the taking of other action by the
    Counterparties against, and any other notice to, the Company,
    the Guarantor or others.













 






    The Counterparties, at any time and from time to time without
    notice to or consent of the Guarantor and without impairing or
    releasing the obligations of the Guarantor hereunder, may, with
    respect to the Guaranteed Obligations: (1) agree with the
    Company to make any change in the terms of any obligation or
    liability of the Company to the Counterparties, (2) take or
    fail to take any action of any kind in respect of any security
    for any obligation or liability of the Company to the
    Counterparties, (3) exercise or refrain from exercising any
    rights against the Company or others, or (4) compromise or
    subordinate any obligation or liability of the Company to the
    Counterparties including any security therefor. Any other
    suretyship defenses are hereby waived by the Guarantor.



 



    This Guaranty shall be subject to and only effective on and
    after the closing of the transactions contemplated in the
    Purchase and Sale Agreement, dated as of the date hereof,
    between Ridgewood Maine, L.L.C. (“RM”), Indeck Energy
    Services (“IES”) and Guarantor, pursuant to which RM
    and IES shall sell, assign, transfer and convey to Guarantor
    their respective membership interests in the Company. This
    Guaranty shall continue in full force and effect until the later
    of (A) the termination or expiration of the Backup
    Agreement and (B) the satisfaction of all of the
    Company’s obligation under the Backup Agreement and the
    Guarantor’s obligations under this Guaranty.



 



    This Guaranty shall continue to be effective or be reinstated,
    as the case may be, if at any time any payment of any of the
    Guaranteed Obligations are annulled, set aside, invalidated,
    declared to be fraudulent or preferential, rescinded or must
    otherwise be returned, refunded or repaid by the Counterparties
    upon the insolvency, bankruptcy, dissolution, liquidation or
    reorganization of the Company or any other guarantor, or upon or
    as a result of the appointment of a receiver or conservator of,
    or trustee for the Company or any other guarantor or any
    substantial part of its property or otherwise, all as though
    such payment or payments had not been made. To the extent that
    any payment by the Guarantor hereunder is annulled, set aside,
    invalidated, declared to be fraudulent or preferential,
    rescinded or must otherwise be returned, refunded or repaid by
    the Counterparties, the amount available under the Liability Cap
    will be restored by an amount equal to such payment.



 



    The Guarantor may not assign its rights nor delegate its
    obligations under this Guaranty, in whole or in part, without
    prior written consent of the Counterparties, and any purported
    assignment or delegation absent such consent is void, except for
    an assignment and delegation of all of the Guarantor’s
    rights and obligations hereunder in whatever form the Guarantor
    determines may be appropriate to a partnership, corporation,
    trust or other organization in whatever form that succeeds to
    all or substantially all of the Guarantor’s assets and
    business and that assumes such obligations by contract,
    operation of law or otherwise. Upon any such delegation and
    assumption of obligations (including any obligations arising
    prior to such delegation and assumption), the Guarantor shall be
    relieved of and fully discharged from all obligations hereunder,
    whether such obligations arose before or after such delegation
    and assumption.



 



    THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN
    ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK
    WITHOUT GIVING EFFECT TO PRINCIPLES OF CONFLICTS OF LAW.
    GUARANTOR AGREES TO THE EXCLUSIVE JURISDICTION OF COURTS LOCATED
    IN THE STATE OF NEW YORK, UNITED STATES OF AMERICA, OVER ANY
    DISPUTES ARISING UNDER OR RELATING TO THIS GUARANTY.



 



    Very truly yours,



 








    COVANTA ENERGY CORPORATION



 


			
	 	    By: 
	
    /s/  Anthony
    J. Orlando









    Name:     Anthony J. Orlando



			
	 	    Title: 
	
    President and Chief Executive Officer





    

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